U.S. poultry industry to urge retaliation if South Africa ends quota

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JOHANNESBURG (Reuters) - The United States poultry industry will press its government to retaliate if South Africa suspends a quota that excludes some U.S. imports from an anti-dumping tariff, the head of a poultry trade group said.

FILE PHOTO: Chickens are seen at a poultry farm outside Klerksdorp in the North West province, South Africa, August 15, 2018. REUTERS/Siphiwe Sibeko/File Photo

The South African Poultry Association (SAPA) has filed a lawsuit seeking to force the government to suspend the quota in response to the Trump administration’s decision to impose tariffs on aluminum and steel imports from South Africa.

“We will certainly be encouraging our government to take appropriate action,” James Sumner, president of the USA Poultry and Egg Export Council, told Reuters late on Tuesday.

The looming row could put at risk duty-free access to the U.S. market for nearly $2 billion worth of South African exports, government officials and trade experts say.

South Africa levies a tariff on “bone-in” poultry that it says is exported by major world producers, including the United States, at prices below the cost of production.

The U.S. poultry industry believes the anti-dumping tariff is illegal.

Threatened with losing its benefits under AGOA - the United States’ flagship trade legislation for Africa - South Africa agreed to a quota in 2015 allowing some 65,000 tonnes of meat from U.S. producers to be imported tariff-free each year.

AGOA grants qualifying countries duty-free access to the U.S. market for thousands of goods. More than $1.8 billion in South African exports to the United States were covered by AGOA last year.

However, South Africa’s poultry association is arguing that tariffs of 25 percent on steel and 10 percent on aluminum imports imposed by Washington earlier this year violate the quota agreement by curtailing AGOA benefits.

“We hope that the U.S. and South Africa will amicably resolve and differences they have over the (steel and aluminum) tariffs but it should not interfere with agreements already reached on poultry trade,” Sumner said.

Reporting by Joe Bavier; Editing by James Macharia and Richard Balmforth